Early this month, several videos were posted on social media which claimed that a certain entity was allowed to go into crowdfunding even after the Securities and Exchange Commission (SEC) filed several cases against the entity and some of its officials.
The SEC also came up with an official statement denying the claim of those behind the videos.
In view of this latest incident, the TIMES is reprinting the warnng from the SEC and the ways on how to spot scams. Here are some of the steps that need to be considered:
–Be wary of unexpected telephone calls, letters, or even personal visits from people who offer quick profit schemes that require your immediate investment.
–Be suspicious of “inside information,” hot tips, and rumors that supposedly will give you a big advantage over other, less knowledgeable investors.
–Turn down money request accompanied by highpressure warnings like “Tomorrow will be too late”, “Positioning is important” or “Act now because there will soon be long waiting lists of others who want to take advantage of this golden opportunity.”
–Be wary of schemes that give emphasis on recruitment of members or “downlines,” particularly if the product being offered is overpriced, as the same may be a disguised pyramiding scheme.
–Do not engage in foreign currency trading unless you fully understand the mechanics or dangers of currency trading and can afford to lose your money (margin or security deposit). There is no such thing as a guaranteed return in currency trading.
–Ask for a prospectus, offering circular, financial statement, or other similar document before you even consider investing. Then read the small print carefully, particularly on refund, and make sure you understand the terms thoroughly before signing any kind of commitment.
–When in doubt, make no promises or commitment, no matter how tentative. Remember, “if it sounds too good to be true, it usually is.” It is far better to wait and lose an opportunity than to take the plunge and lose everything.
–Before making a commitment, get an opinion from your lawyer, stockbroker, accountant, or the appropriate government office.
–Always demand official receipts in the name of the corporations or entities you are dealing with.
–Note that a Primary SEC Registration only grants juridical personality. It does not automatically give a company the authority to engage in all types of business activities such as lending, selling of securities and investment contracts, investment taking, etc. To confirm that the company or individual is properly licensed to conduct the business in question and has no history of violating the law, get in touch with the SEC.
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